facility management indicators for high-rise residential property in malaysia

Facility Management Indicators for High-Rise Residential

Property in Malaysia

A.I. CHE-ANI1, N.M. TAWIL

1, A. SAIRI

2, N.A.G. ABDULLAH

1,

M.M. TAHIR1, M. SURAT

1

1Department of Architecture, Faculty of Engineering and Built Environment,

Universiti Kebangsaan Malaysia

43600 UKM Bangi, Selangor, MALAYSIA 2Building Control Division, The Engineering Department, Kajang Municipal Council,

43300 Kajang, Selangor, MALAYSIA

[email protected], [email protected], [email protected], [email protected],

[email protected], [email protected]

Abstract: Living in a residential high-rise is now becoming a lifestyle trend among the urban

professional community in Malaysia. As opposed to a landed property, in a residential high-rise,

residents must set up a Management Corporation (MC) to regulate and manage all the amenities

provided by the developer, as stipulated in the Strata Title Act of 1985. To a certain extent, the idea

seems to work successfully for about a few years after the housing schemes are granted with the final

title. However, as time goes by and management becomes more ineffective, a gap grows between the

residents and the council members of the MC, which is made up of a select group of residents. This

research focuses on the indicators for sustainable facility management. We used residents’ satisfaction

levels as the primary measurement criteria used to identify and measure the gap between the residents

and the Management Corporation, and we analyzed our data using ANOVA and MANOVA. Further

analysis is conducted using the Bonferonni test to determine differences among groups of

respondents. The findings of this research revealed that there were significant differences in terms of

satisfaction between the Management Corporation and the residents, as the Management Corporation

reported a higher level of satisfaction compared to the residents in every criterion.

Key-Words: Building management, Facility management, Management corporation, Residential high-

rise, Property management, Sustainable indicators, Resident satisfaction, Strata title

1 Introduction Living in a residential high-rise has become a

trend in Malaysia today, especially among city

dwellers. One of the reasons many prefer to

live in a residential high-rise is the facilities

provided within the housing area. The

residents pay a fee for the facilities provided,

while the Management Corporation (MC) is

responsible for managing the facilities.

The life cycle of management in a given

Malaysian residential high-rise can be

categorized into three periods, namely, before

the establishment of the MC, during the initial

establishment of the MC, and after the

complete establishment of the MC, after which

the developer hands over management

responsibilities completely to the residents [1,

2]. Today, the residential high-rise is governed

by the Strata Title Act of 1985 (hereafter

referred to as the STA, unless otherwise

specified). Malaysia’s STA was adopted from

the New South Wales Conveyancing Act of

1961 [3].

This paper focuses on residential high-rises

managed by residents through an MC. The

first two periods are not included in this study

because during these periods, the management

is temporary in nature and the residents have

no say in managing their own property.

Theoretically, in managing a residential high-

rise, both parties, i.e., the MC and the

residents, have to achieve a consensus on all

management-related matters. This is to ensure

effective management, thus contributing

towards sustainable development.

Unfortunately, this study found that there was

a pattern of management gaps between the MC

and residents. This paper starts by briefly

discussing several key issues that may lead to

a management gap. It then follows with a

WSEAS TRANSACTIONS on ENVIRONMENT and DEVELOPMENTA. I. Che-Ani, N. M. Tawil, A. Sairi, N. A. G. Abdullah, M. M. Tahir, M. Surat

ISSN: 1790-5079 255 Issue 4, Volume 6, April 2010

discussion of the methodology used in this

study as well as its prominent findings.

2 General Overview of High-Rise

Residential Facility Management High-rise residential differs from the other

various forms of properties. The development

of the housing units in one particular lot is the

most significant character that differ high-rise

residential from landed property. Apart from

this, the uniqueness of high-rise residential can

be seen by the management of the property

after it has been occupied. At this point, the

issues on facility management arises [4].

Every single facility available has to be

managed together with the residents through a

mechanism by MC. For housing on sale, the

various backgrounds and ethnics of the

buyers/owners has lead to the aspect of

managing the housing scheme to be conducted

systematically and accordingly. This is

significant as to ensure the majority of the

owners reserved, while the minority does not

feel abused [5].

In conjunction of handling the aroused

issues, the STA is introduced. One of the

important points in the STA is the

establishment of the MC which will manage

the high-rise residential when the final strata

title has been issued. In relation to their duty

and responsibility, STA allows the

Management Corporation to appoint a

Management Agent.

The aspect of facility management which

includes property management activities and

maintaining the high-rise residential scheme is

the main agenda for the MC. Basically the MC

is responsible in anything regarding

management and maintaining the facilities of a

building [6, 7, 8, 9]. Before the committee

member of MC involves the residents, it is sit

by the developers which are the sole proprietor

for any particular housing scheme. In

contributing to the responsibility of the MC,

the inefficiency of facility management has

always been mutterings among residents.

In relation between facility management

and high-rise residential, the most essential

element to be considered is the value for

money, which contributes to the effectiveness

of the housing scheme. This is because the

owners had invested the amount of money as

the payment for maintenance and on special

account (hereafter referred to as the

management fund, unless otherwise specified).

Liias [5] and Ozdemir [6] have foreseen these

investments could not be avoided and is the

most significant to uphold the quality of all

facilities – be it structural as well as building

services. When these elements are seen as

investment, the residents (members of MC)

will surely wants the best with highest

qualities, in parallel with what they had spent

[5].

Thus, the equilibrium between the

investments with the quality level of the

facility management services has to align in

order to compliment the value of money. In

definition of maintenance, this equilibrium is

known as acceptable standard by the

agreement with involved parties and the

quality of works. MC has to meet this

equilibrium to be an effective facility

management in housing scheme. The widely

used benchmarking for this purpose is always

refers to the financial ability of a high-rise

residential scheme.

3 Issues in Residential High-Rise

Management Residential high-rises are unique properties

that differ from landed properties such as

bungalows or terrace houses. They are unique

insofar as, after the properties have been

occupied, facilities must be jointly managed

by residents [4]. To address these unique

issues pertaining to management and

maintenance activities as well as to

supplement the National Land Code that

proved ineffective for residential high-rises,

the STA was implemented in 1985 [9].

According to the STA, the MC is accountable

for all management and maintenance aspects

of the overseen properties and common

facilities therein [6, 7]. Unfortunately, in our

study, most of the housing schemes were not

effectively managed. Residents complained

about incompetent facility management, such

as dysfunctional lifts, rubbish not collected

according to schedule, vandalism, misuse of

sinking funds, as well as disputes among

residents. In short, the issues raised by

residents were centred on three aspects

necessary to effectively manage a facility,

namely, finances, maintenance, and people,

that is, the residents themselves. These three



aspects are, in fact, the indicators in

determining the performance of residential

high-rise management. The sustainable

development in this context means the

achievement of housing schemes in providing

equal balance of satisfaction among the aspect

of finances, maintenance and people.

Alternatively, the most challenging issue

faced by management in managing a

residential high-rise was collecting the

monthly maintenance dues necessary to run

facility management activities [5, 7, 11, 2, 9].

The maintenance dues, or charge, are a fee

imposed on all the residents that is used to

maintain the facilities [12]. For residential

high-rises, the amount charged is based on the

unit size [12]. Unfortunately, there are some

residents who contend that the amount charged

is higher than what they had expected, and

they therefore refuse to pay.

Some residents offered rather, unpersuasive

excuses to avoid paying dues; for example,

some claimed that they did not fully use the

facilities provided [7] or that the charge was

not reasonable considering to the quality of

service [11, 9]. According to Teo [6], although

the MC can legally prosecute residents in

order to collect owed dues according to Sect.

52(2), Sect 53A, Sect 53(2) and Sect 55A of

the STA, MCs rarely choose to do so because

doing so is impractical [9]. In addition, such

legal actions may affect the other residents’

image [2]. When most residents neglect to pay

the charge, the fund is insufficient to properly

manage the facilities. As a result, most of the

facility management activities cannot be

carried out on time and thus affect the

effectiveness of facility management for the

building as a whole [11, 9].

These issues lead to a management gap

between MCs and residents with regard to

managing the facilities of residential high-

rises. The management gap occurs when the

services expected by the residents cannot be

delivered by the MC, thus adversely affecting

the sustainable indicators. Since the residents

pay on a monthly basis, they expect the facility

management to be effective. Under the STA,

the MC is legally required to provide the

services of a management agent and as such is

the party responsible for running the facility

management activities. In practice, most MCs

function poorly because they don’t have the

expertise to run and properly maintain the

housing complex. If the MC fails to function

as stipulated in the STA, the residents of that

particular housing complex have the right to

summon the said MC. Therefore, in order to

avoid legal action, the MC normally engages a

management agent in order to transfer its

liability regarding the housing complex.

Even so, a management gap continues to

exist, as evidenced by on-going reports in

mass media on the topic [9]. Residents

continue to complain about the low service

quality of facility management provided by

their management agents as well as the lack of

responsibility of the MC in ensuring effective

facility management. In discussing this matter,

this paper uses the Malaysian case study as to

analyse the sustainable indicators of residential

high-rise management.

4 The Framework of Sustainable

Indicators As depicted in Fig. 1, the framework shows

the relationships among 12 variables in

measuring the management gap. Each variable

is a sustainable indicator for residential high-

rises. They are categorized under three

constructs, namely, finances, maintenance and

resident; each of these constructs has its own

dimensions. In between these constructs and

dimensions, there are the different categories

of respondents: member of MC, management

agent and resident.

The finances construct has three

dimensions, namely, financial resources,

financial allocation and financial expenses. In

running day-to-day activities, the MC needs

resources; otherwise, little can be done. In

medium and high-cost residential high-rises,

the amount of collected maintenance charges

was just enough to run the facilities. In

addition, finances should be planned via

sensible allocation and monitoring of

expenses. For example, allocations for

cosmetic recovery should be the last agenda in

housing maintenance activity [13]. Effective

facility management is not merely based on

the collection of funds itself but also on the

capacity to effectively manage limited

resources according to need [14].

The second construct, i.e., maintenance,

also has three dimensions, namely, service

quality, health and safety quality, and

maintenance quality. Building maintenance is

one of the crucial tasks in facility management



[15]. It also plays a major role in providing

sustainable housing. Theoretically,

maintenance can be seen from a ‘hard’ or

‘soft’ perspective. The ‘hard’ perspective

refers to the maintenance output or product

insofar as the resident can see and feel the

impact of maintenance work. For example,

landscaping provides well-kempt scenery that

the resident can directly view and enjoy. The

‘soft’ perspective considers the service quality

with regard to carrying out the particular work.

This perspective focuses more on the human

response, that is, customer service. With

regard to safety and health quality,

maintenance is often undertaken to safeguard

residents’ health; in other words, they should

feel secure and comfortable living within their

compounds.

Figure 1: The research framework

Third, we consider the resident construct,

which also has three dimensions, namely,

resident involvement, resident responsibility

and resident alertness. For facility

management to be effective, the end-user must

be able to respond effectively to management.

The participation of residents is crucial, since

all facility management activities are designed

for and dedicated to them. In addition,

residents pay the maintenance charges.

Residents should be involved at the Annual

General Meeting used to set up the MC, since

this is when the amount of the monthly fee is

determined and agreements are made

according to the STA. Other than involvement,

the residents should also understand their

responsibilities as members of their residential

communities. That is, they should embrace a

neighborly spirit and avoid selfishness; the

extent to which residents do so appears largely

dependent on the residents’ background and

status (owner or tenant). Finally, residents

should also be alert regarding on-going

changes, such as housing rules, community

activities within their housing scheme,

environmental conditions, and maintenance

service standards, especially routine

maintenance work.

5 Effectiveness Measurement of

Facility Management For the purpose of this paper, a measurement

of effectiveness is tested. In relation to this,

the first thing that needed in measuring the

effectiveness is to know the objectives of

facility management for high-rise residential.

In conjunction with the view mentioned by

Kemp [16], Varcoe [17] and Rushmer [18], the

fundamental of determining the effectiveness

of one thing, is to foresee its main objectives.

Principally, a good objective has five main

criteria, namely specific, measurable,

achievable, reasonable/reliable and time;

which normally termed as SMART. However,

in context of high-rise residential

management, most of the objectives of the

organisations do not include all five criteria

mentioned. The objective made might have

just two or three criteria only. For instance,

referring to DBKL [19], the objectives of

Department of Housing Management, DBKL

are as follows:

“Managing and maintaining local

residential housing scheme as to provide

comfort for residents of Local Housing;” and

“Encourage a harmony, healthy,

cooperative and responsible community”.

(DBKL [19]; pp. 18)

Apart from this, out of five from the

mission outlined by the Building Services

Department (the body that manage public

housing in United Kingdom), the first two are

regarding residents’ satisfaction as mentioned

by Croal [20]. The mission statements are as

follows:



“(i) to provide a service that meets

customer needs rather than

prescribing them;” and

“(ii) to put the customer first in terms of

courtesy, reliability and efficiency.”

(Croal [20]; pp. 233)

According to the above statement, it is

clearly shown that the objectives of housing

management have to consider the residents’

satisfaction, as the most significant person of a

housing scheme. Indirectly, it is parallel with

the principles of facility management which

mentioned that the authorizations of the

stakeholders have to be prioritized [21]. Kern

[22] also mentioned the same point regarding

this matter. In context of facility management

in high-rise residential, residents are the

clients. The designation of the clients (the

residents) into the facilities design has been

simplified by Kerns [22] as shown in Fig. 2.

Figure 2: Strategic relation in facilities design

[22]

According to Fig. 2, clients or residents has

to be the core element inside the facilities

design and has to relate strategically with the

elements of other facility management, which

includes organisation, facility, product and

process. This situation visualises the

interactions between the client (referring to the

level of satisfaction) towards all four elements

of facility management are significant in

building an effective management of facilities.

This authorization is emphasized by the

statement from Kerns [22] about the

significance of the clients as follows: “With this close interaction, the economics

of customer cultivation become more

important. It costs five times as much to create

a new customer as it does to make the same

sale to an existing customer.” (Kerns [22]; pp.

31).

Furthermore on measuring the effectiveness

of housing organisations, Bratt [23] stated that

there are three indicators that can be applied as

guidelines, which are the rental collection,

building condition and financial status. In this

paper, the rental collection indicator is invalid

since the focus of the study is regarding the

category of housing for sale.

Furthermore, the effectiveness

measurements are also made from two

perspectives, which are (i) MC and Managenet

Agent; and (ii) residents who used to be or has

experienced of being appointed previously as

the council members. The level of satisfaction

of MC is however the most essential to be

considered since they are the stakeholder of

the said high-rise residential scheme. This is

because according to Clapham [24], the

current measurement made solely base on the

residents’ (who used to be members of the

council) level of satisfaction has its own risk.

The level of residents (or tenants)

satisfaction is rarely used by the federal

government agencies in Britain in deciding the

performance indicator [24]. Clapham [24]

mentioned that:

“The primary problem is that no-one knows

what influences tenants to respond in certain

ways. What reference point do tenants use

when assessing whether the service is

satisfactorily ...” (Clapham [24]; pp. 767).

The level of satisfaction for this paper is

also measured from the perspective of the

Management Agents and residents who have

joined as the members of Management

Corporation, in support of the views by

Clapham [24]. This also indirectly provides an

insight for the explanation of the certain

phenomenon emerge from the analysis made.

Next, the measurement on levels of

satisfaction will be substantial through three

constructive aspects, namely finances,

maintenance and resident. Varcoe [17] view

has been considered to explain this situation.

Financial is one of the important aspects that

could not be neglected in measuring facility

performance [25, 26]. However, relying on the

financial satisfaction level factor solely for the

effectiveness of the organization is less apt and

unfair. Referring to this point of view, the

level of satisfaction on maintenance and

resident aspect also has to be considered in

justifying the effectiveness of high-rise

residential scheme. In summary, Fig. 3 shows

the effectiveness of facility management

measurement for high-rise residential scheme,

which adopted in this paper.



Figure 3: Effectiveness measurement of

facility management for high-rise residential in

Malaysia

6 Methodology The research strategy we adopted was

quantitative in nature. Our data collection

technique involved a personally assisted

questionnaire. The questionnaire was

formulated based on the facility management

variables described above, which consisted of

financial, maintenance and resident constructs.

These constructs are the sustainable indicators

for residential high-rise management. The

respondents had to respond to items based on a

five-point Likert scale; these items asked

about the respondent’s satisfaction level. The

range of the scale was 1 = not satisfied; 2 =

less satisfied; 3 = neutral (neither satisfied nor

dissatisfied); 4 = quite satisfied; and 5 = very

satisfied. The data analysis was run using the

Statistical Package for Social Sciences (SPSS),

version 12.

Based on the statistics provided by the State

Land Office, there were only 495 non-low-cost

housing complexes that fulfilled the samples’

main criterion, which was that these non-low-

cost residential high-rises had already

conducted their First Annual General Meeting.

We sampled approximately 30% or 150 of

these 495 housing schemes and thus were able

to calculate our variables at a 96% confidence

level (see www.custominsight.com for

sampling calculations). The sample selection

was conducted using SPSS. Each non-low-cost

housing complex was represented by five

respondents, namely, three members of the

MC, one Management Agent and one resident

who had experience as a member of the MC.

Therefore, we interviewed a total of 750

respondents.

In order to identify the management gap,

this study analyzed differences in satisfaction

level using MANOVA and ANOVA. Before

proceeding with MANOVA, a statistical pre-

test was conducted using Levene and Box’s M

tests to determine the equality of variance

assumptions and the variance-covariance

matrix. The p value of both pre-tests should indicate insignificance, i.e. p value > 0.05, in

order to conduct MANOVA and/or ANOVA.

To further analyze differences among

respondent categories, this study proceeded

with the Bonferonni test. We assumed that the

management gap existed when there was a

significant difference in levels of satisfaction

among respondents.

7 Discussion of Findings A pilot study was first carried out involving

150 respondents in 30 housing complexes.

This sample was selected randomly from the

total respondents to justify the reliability of the

measurement scale of each variable.

According to the results from this pilot study,

all the variables had internal consistency. In

addition, each variable had a Cronbach’s

Alpha above 0.8, suggesting that each had

high reliability. To determine whether a

parametric or non-parametric test should be

used, a normality test using the Kolmogorov-

Smirnov technique was carried out. We used

this technique, because our sample size was

greater than 100. In short, the p value was less

than 0.05, but the skewness value was between

-1 and 1. Therefore, the data could be

categorized as normal, and thus, the parametric

test was used for statistical analysis.

The unit of analysis was the satisfaction

level among the three categories of

respondents, namely, the members of the MC,

the management agent and the resident.

According to our research framework as per

Fig. 1, this study concentrated on the analysis

of satisfaction level with regards to the central

concept (effective facilities management)

among the three aforementioned constructs.

Our analysis showed a pattern of management

gap insofar as it relates to effective facility

management, which also implicates the

sustainable indicators. The results of this study

are presented below.

Table 1: Levene Test for Constructs

Constructs F statistic P value



Finances 0.224 0.799

Maintenance 0.039 0.961

Resident 1.095 0.335

Table 2: Box’s M Test for Constructs

Value F statistic P value

4.574 0.378 0.972

Tables 1 and 2 show that there were no

significant differences between the Levene and

Box M tests. Therefore, MANOVA and

ANOVA are valid tools to analyze to the

relationship between the constructs and the

respondent categories.

Based on the results in Table 3, MANOVA

revealed that collectively, there was a

significant difference among the constructs

according to respondent category. The

ANOVA also showed a significant difference

in the satisfaction level of different categories

of respondents for every single construct.

Looking at the mean score, residents reported

the lowest satisfaction level for all constructs

as compared to MC members and management

agents.

Table 3: Result of ANOVA and MANOVA for Constructs

Multivariate Test F statistic P value

Wilks' Lambda 7.717

(0.941) 0.000*

Constructs Respondent N Mean

Score

Standard

deviation F statistic P value

Finances MC 450 3.2737 1.0355

3.377 0.035* Mgt. Agent 150 3.1408 1.0060

Resident 150 3.0353 0.9916

Maintenance MC 450 3.2747 0.7139

9.163 0.000* Mgt. Agent 150 3.4227 0.6993

Resident 150 3.0754 0.6939

Resident MC 450 3.1082 0.7809

3.750 0.024* Mgt. Agent 150 3.0727 0.7325

Resident 150 2.9107 0.7579

*Significant at 0.05

Table 4 shows further differences according to

respondent category. It also depicts a pattern

of significant difference, especially between

MC members and residents, for each

construct. In addition, there was a significant

difference between management agents and

residents regarding maintenance, as residents

were less satisfied with maintenance as

compared with management agents. Overall, it

seems that residents were less satisfied than

the other respondents for all three constructs.

In other words, our analysis showed a

management gap in terms of facility

management in residential high-rises. To make

our results more generalisable, we discuss the

concept of effective facility management

below.

The pre-test shown in Table 5 (where the p

value indicates insignificance demonstrates

that it is appropriate to conduct an ANOVA to

analyze the relationship between respondent

category and satisfaction level regarding the

effectiveness of facility management. Based

on Table 6, there is a significant difference in

satisfaction level among respondents regarding

effectiveness. Moreover, the satisfaction level

of residents was lower than that of other

respondents.

Table 7 shows that the only significant

difference in satisfaction level regarding

effectiveness of facility management was

between MC members and residents; residents

were generally less satisfied. This finding

further confirms the existence of a

management gap with regards to facility

management of residential high-rises.

Based on the analysis above, the main

reason for all the issues that have arisen in the

facility management of residential high-rises

in Malaysia is now clear. The management

gap not only exists but also forms a barrier to

providing effective facility management. Note



that the residents were always found to be less

satisfied than MC members. The management

gap can be termed as ‘in-house’ shortfalls,

since in almost all cases; there was no

significant difference between the satisfaction

levels of the management agents, with the MC

members and the residents. Based on these

findings, the management gap appeared to still

be in its infancy among sampled housing

complexes; in short, it was not considered to

be serious, since the difference in mean score

was not more than 1. Therefore, there is still

room for improvement for both parties. The

MC and residents may be able to rectify their

relationship and minimize the management

gap through more effective facility

management. In regards to sustainable

indicators, our analysis shows that the

management of residential high-rises is not

sustainably managed as a whole. This can also

be considered as a rating system in

sustainability, as suggested by various scholars

[27, 28, 29, 30].

8 Conclusion This paper has discussed the management gap

as an indication of sustainable management in

residential high-rises in Malaysia. The

management gap exists when there is

significant difference in satisfaction levels

among respondents regarding various

components of facility management, including

finances, maintenance, and resident aspects, as

well as regarding the effectiveness of

management. The issue of facility

management in residential high-rises is

reported quite extensively in the mass media,

which suggests the existence of such a gap.

This study has confirmed the management

gap, which indicates that housing management

in Malaysia on the whole has yet to embrace a

sustainable management agenda. This gap also

has been a barrier for both the Management

Corporation and residents as they cooperate in

effective facility management.

The identification of the management gap

also contributes to the so-called ‘chicken and

egg’ debate within the literature on MCs.

According to our data, the management gap is

not yet at a serious stage, thus yielding an

opportunity for the parties involved to

minimize the gap. Since this condition could

worsen in the near future, it is necessary to

identify the exact needs and expectations of

both parties vis-à-vis each other. Since there

was no significant difference with the

residents and MC members in the perspective

of management agents (except regarding

maintenance), we suggest that the

management agents act as mediators in

bridging the management gap. With this

suggestion, we hope to brighten the

possibilities of achieving sustainable housing

management in the future.

Table 4: Result of the Bonferonni Test for Constructs

Constructs Respondent Respondent Difference of

mean score P value

Finances MC Mgt. Agent 0.1329 0.503

MC Resident 0.2384 0.040*

Mgt. Agent Resident 0.1055 1.000

Maintenance MC Mgt. Agent -0.1480 0.080


Mgt. Agent Resident 0.3472 0.000*

Resident

MC Mgt. Agent 0.0355 1.000



* Difference of mean score was significant at 0.05



Table 5: Levene Test for Effectiveness

Concept F statistic P value

Effectiveness 0.916 0.400

Table 6: Result of the ANOVA for effectiveness

Concept Respondent N Mean

Score

Standard

deviation

F

statistic P value

Effectiveness MC 450 3.4015 1.0774

3.851 0.022* Mgt. Agent 150 3.2222 1.0105

Resident 150 3.1489 1.0981

*Significant at 0.05

Table 7: Result of the Bonferonni Test for Effectiveness

Concept Respondent Respondent Difference of

mean score P value

Effectiveness

MC Mgt. Agent 0.1792 0.227



* Difference of mean score was significant at 0.05

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